Unique products are often touted as overpriced, expensive, outlandish – and every other epithet available to describe a high monetary value in a negative manner.
And yet, it’s the uniqueness of such products that defines their value and price.
There are very few things more unique than domain names, and as far as digital assets go, domains are quite portable.
Unlike real estate that is often compared to domains to establish the concept of property, domain names exist in the digital realm. In all technicality, domain names are simply digital entries in a central database.
And yet, this intangible asset is connected to the effectiveness of products and services for millions of companies worldwide.
When you have a unique domain you dictate what it’s worth.
The market simply records the exchange of domains for money, and while comparative sales offer a window to existing data, they do not determine the value of your domain names.
Every domain is not only unique, it also presents its current owner with the opportunity to increase its value by defining its worth explicitly, or by its association with products and services.
Most domains can be converted into brands, extending the monetary value of the underlying domain. Subsequent sales of branded domains are typically higher than if the domain were just another digital entry in the Registry.
By pricing your domain names aggressively, you ensure that the best ones appreciate in value, and become brands ready to be acquired by budget-minded buyers. Respectively, under-pricing your domains devalues them until a savvy buyer takes over.
Whether a domain is under priced or not is also unique to each perspective appraiser.
There are other factors that come into play IMO, portfolio size, need to generate sales, replacement ability.
I know many have thought that BuyDomains underpriced a lot of their inventory but it suited their needs.
Raymond – The concept isn’t really revolutionary. When you own a unique domain suitable for a business or a product, you have the option to develop into a brand and appreciate its value. Alternatively, you can seek compensation for the digital asset, based on your expert valuation of the asset, from any other party interested in the domain. As time goes by, that valuation might adjust, but the idea is to treat your domain asset exactly as it is: unique.
Much of what you’re writing is true. I’ve gotten a lot of offers over the years for the name Jonathan.com. There may be millions of people around the world name Jonathan. How many of those Jonathan’s know the value of Jonathan.com is relative to the time it takes for them to realize they want it. Wanting is different than needing.
The ones that “need” it would probably come up with a lot more money for the name. The longer I wait, the larger the pool of buyers of wants, become needs. It’s a matter of timing and numbers. The seller dictates the conditions for acquiring.
Since my son’s name is Jonathan, so the name is not really for sale which makes the name more valuable.
So yes, in holding on to a name that many people want and need, I dictate the value. But likewise, an extraordinary money offer could change that scenario.
Oh I agree with the unique point and with an experienced investor the article is spot on. It is I just see so much, my domain is unique and price it at $25,000 when the domain is nowhere near any good and just hand regged.
Those who are new to the business have to make sure they understand pricing.
What is up with the time limit on the captcha ? I put it in right away I get time expired.
Raymond – Most of what I wanted to say on the subject was covered by Michael. 🙂
Should I add a note that as a first step you need to “weed and feed” your domains? Beginners in domain investing go after questionable domains. One should be a pragmatist and perform due diligence on their own assets. My point is that once your domain portfolio matures, you define the price – not the random offer makers.
Sorry about the captcha, it seems to start off with a cached value.
Oh no problem I just refresh and it does not erase the comment so now it easily goes through on the second time. Thank you
Domain valuation for high quality names is much more complicated than most people assume, and is tied to the potential buyer group(s) that would have an interest in what you’re offering. A smaller local company may think $10,000 for a good domain name is a fortune whereas a global corporation would think little of spending $100,000 for a quality domain.
I was monitoring a presentation by an oil major the other day and they revealed that their one year ad budget, in europe alone, was $250 million. While that is the rare outlier, it also points to the huge differences that exist among buyers in their ability to pay a premium for something that is truly rare and that serves their needs.
Automattic (who own WordPress) just paid $19 million for the rights to the .blog tld. There were other major bidders involved that obviously drove the price that high. As Michael said, when a company “needs” it, price is less important than making sure they get “it”.
So I am with Acro on this one 100%. As a seller, you want to achieve a balance between selling too quickly, too cheaply vs. grossly over-valuing and possibly missing out on a nice sale. The greatest advantage you can have is being in a position where you don’t have to sell, and can afford to wait.
many domainers don’t realize that they can influence companies branding strategies by the very domains created. I put myself in an ad agencies position when I look at my brandables and ask if this is a name to grow a business on.
especially in vr/ar/360 niche now there is huge opportunity to create brandable domains to offer major corps and startups as they want cool trendy relevant brands to build apps on, games, product lines, etc
as far as values as acro says don’t give them away! domainers don’t realize the influence they have as too many amateur minded flippers are in it for quick doe when they should also be looking at more value from their domains.
its called anchoring, ask more u get more.